How Tech Industry Price Increases May Impact Your Business

By Terryn Larosche

Dec 21, 2021 10:00:00 AM

About 5 minutes

The pandemic has triggered shortages and price hikes on everything from toilet paper to rental cars. These problems can be caused by issues with the supply chain, meaning products and the materials needed to manufacture them are scarce. Business technology is no exception.

As a technology provider, ProActive Solutions has seen price increases across the industry. Supply chain issues may be causing the price inflation, but the root cause is up for debate.

With the end of the pandemic still uncertain, you must understand how these rising technology prices will affect your business and how to minimize the impact.

Technology Prices Are Rising: Impacting Managed IT Solutions

Some of the leading technology & IT manage service providers have announced price increases, or higher prices are rumored to be on the horizon. Technology partners have already seen price jumps from IBM, Cisco, and NetApp. Higher prices are also anticipated from most vendors into 2022.

One reason behind price increases may be a shortage of the raw materials needed to create computer chips and other components. Any time a material is in short supply, it drives prices of completed products up. When component and material prices go up, the costs are passed on to you, the customer.

Why Buying New Technology & Infrastructure Capabilities Is Unavoidable

While announcing its new, higher prices, Commvault underscored why companies must pay up. Commvault included an end-of-life reminder, letting partners and customers know that legacy hardware models were being removed from the list.

As technology ages, it must be replaced to avoid losing support or experiencing equipment failure. Whether customers like it or not, they need to purchase new solutions from the current price list.

What IT Price Increases Mean for Your Business & Total cost of ownership (TCO)

Most companies are trying to do more with less when it comes to technology. These recent price increases mean doing more with even less. Finding the budget for IT can be a challenge in the best of times. Price increases will force you to rework your budget, possibly sacrificing innovation for necessity.

Instead of progressing along your digital transformation journey, you may need to focus on upgrading and refreshing the hardware that is on its last legs just to avoid downtime. Convincing decision makers to increase your funding to cover price hikes will be difficult, especially for strategic projects.

In this market, your IT team will need to understand the total cost of ownership (TCO) and how it is balanced out by return on investment (ROI) for each piece of technology you plan to procure. Being able to rationalize the investment and show how it will eventually pay for itself will help your case when negotiating with line of business (LOB) over new, more costly purchases.

How to Combat Technology Sticker Shock

As technology prices continue to climb, and with the end of the pandemic nowhere in sight, your company must find ways to lessen the sticker shock. Choosing the right technology partner is crucial in times like these. Certified technology partners can often work with you and the OEM to negotiate better pricing and present flexible and affordable consumption models.

ProActive partners with many leading technology companies, including IBM, Cisco, Dell, HPE, Nutanix, Red Hat, and Palo Alto, to provide the hardware and software needed to accomplish digital transformation.

We take a consultative approach to developing technology strategies using solutions that are affordable to purchase and deploy. ProActive will work with you to understand your technology goals and put together a quote that shows how affordable technology can be, even in this time of inflation.

Facing rising technology costs in uncertain times? Partner with ProActive Solutions to navigate price increases with strategic IT solutions that maximize your investment. Let's mitigate the impact together.

Tags: HPE, Cisco, Dell, NetApp, Technology pricing, Commvault, Palo Alto, technology price increases, IBM, Cohesity, Pure, Extreme